_________ Shares
GENAISSANCE PHARMACEUTICALS, INC.
Common Stock
($.001 Par Value)
EQUITY UNDERWRITING AGREEMENT
______, 2000
DEUTSCHE BANK SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXX XXXXX BARNEY, INC.
UBS WARBURG LLC
As Representatives of the Several Underwriters
c/o DEUTSCHE BANK SECURITIES INC.
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Genaissance Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), proposes to sell to the several underwriters (the "Underwriters")
named in Schedule I hereto for whom you are acting as representatives (the
"Representatives") an aggregate of 6,000,000 shares of the Company's Common
Stock, $.001 par value (the "Firm Shares"). The respective amounts of the Firm
Shares to be so purchased by the several Underwriters are set forth opposite
their names in Schedule I hereto. The Company also proposes to sell at the
Underwriters' option an aggregate of up to 900,000 additional shares of the
Company's Common Stock (the "Option Shares") as set forth below.
As the Representatives, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the numbers of Firm Shares set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option Shares
if you elect to exercise the over-allotment option in whole or in part for the
accounts of the several Underwriters. The Firm Shares and the Option Shares (to
the extent the aforementioned option is exercised) are herein collectively
called the "Shares."
The Company and the Underwriters agree that up to 300,000 shares of the
Common Stock to be purchased by the Underwriters (the "Reserved Shares") shall
be reserved for sale by the Underwriters to certain persons designated by the
Company, as part of the distribution of the Shares by the Underwriters, subject
to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. (the
"NASD") and all other applicable laws, rules and regulations. To the extent that
such Reserved Shares are not orally confirmed for purchase by such persons
designated by the Company by the end of the first business day after the date of
this Agreement, such Reserved Shares may be offered to the public as part of the
public offering contemplated hereby.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
(1) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each of the Underwriters as follows:
(a) A registration statement on Form S-1 (File No. 333-35314) with
respect to the Shares has been prepared by the Company in
conformity in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the
Rules and Regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission")
thereunder (except, in the case of the preliminary prospectus
included in such registration statement at the time of its
initial filing, the omission of the number of shares and the
price range and the other information based thereon). Such
registration statement has been filed with the Commission and
the registration statement filed by electronic transmission
pursuant to the Commission's Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX") (except as may be
permitted by Regulation S-T under the Act) was identical to
the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Shares. The Company
has complied with any condition for the use of Form S-1.
Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the
requirements of the Rules and Regulations) contained therein
and the exhibits, financial statements and schedules, as
finally amended and revised, have heretofore been delivered by
the Company to you. Such registration statement, together with
any registration statement filed by the Company pursuant to
Rule 462(b) of the Act, herein referred to as the
"Registration Statement," which shall be deemed to include all
information omitted therefrom in reliance upon Rule 430A and
contained in the Prospectus referred to below, has become
effective under the Act and no post-effective amendment to the
Registration Statement has been filed as of the date of this
Agreement. "Prospectus" means the form of prospectus first
filed with the Commission pursuant to Rule 424(b). Each
preliminary prospectus included in the Registration Statement
prior to the time it becomes effective is herein referred to
as a "Preliminary Prospectus." Any reference herein to the
Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any
supplements or amendments thereto, filed with the Commission
after the date of filing of the Prospectus under Rules
2
424(b) or 430A and prior to the termination of the offering
of the Shares by the Underwriters.
(b) The Company has not distributed and will not distribute, prior
to the later of the Option Closing Date (as defined below) and
the completion of the Underwriters' distribution of the
Shares, any offering material in connection with the offering
and sale of the Shares other than the Preliminary Prospectus,
the Prospectus or the Registration Statement.
(c) This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the
Company, enforceable against the Company in accordance with
its terms, except as rights to indemnification hereunder may
be limited by applicable law and except as the enforcement
hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
or affecting the rights and remedies of creditors or by
general equitable principles.
(d) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease
its properties and conduct its business as described in the
Registration Statement and to enter into and perform its
obligations under this Agreement. There are no subsidiaries,
direct or indirect, of the Company and the Company does not
own or control, directly or indirectly, any corporation,
association or other entity. The Company is duly qualified to
transact business in all jurisdictions in which the failure to
be so qualified would have a material adverse affect on the
business of the Company.
(e) The outstanding shares of Common Stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable; the Shares to be issued and sold by the
Company have been duly authorized and when issued and paid for
as contemplated herein will be validly issued, fully paid and
non-assessable; and no preemptive rights of stockholders are
applicable with respect to any of the Shares or the issue and
sale thereof. None of the outstanding shares of Common Stock
were issued in violation of any preemptive rights, rights of
first refusal or other rights to subscribe for or purchase
securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights (except for
preemptive rights terminating upon the consummation of this
Agreement), rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the
Company other than those described in the Prospectus. Neither
the filing of the Registration Statement nor the offering or
sale of the Shares as contemplated by this Agreement gives
rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares
of Common Stock, which rights, if any, are described in the
Prospectus under the heading "Description of Capital Stock"
and "Shares Eligible for Future Sale." The description of the
Company's stock option and other stock plans or arrangements,
and the options or other rights granted
3
thereunder, set forth in the Prospectus accurately and
fairly presents in all material respects the information
required to be shown with respect to such plans,
arrangements, options and rights.
(f) The Shares have been approved for quotation on the Nasdaq
Stock Market, subject only to official notice of issuance.
(g) The information set forth under the caption "Capitalization"
in the Prospectus is true and correct. All of the Shares
conform in all material respects to the description thereof
contained in the Registration Statement. The form of
certificates for the Shares conforms to the corporate law of
the jurisdiction of the Company's incorporation.
(h) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed
offering of the Shares nor instituted proceedings for that
purpose. The Registration Statement contains, and the
Prospectus and any amendments or supplements thereto will
contain, all statements which are required to be stated
therein by, and will conform in all material respects, to the
requirements of the Act and the Rules and Regulations. The
Registration Statement and any amendment thereto do not
contain, and will not contain, any untrue statement of a
material fact and do not omit, and will not omit, to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and
any amendments and supplements thereto do not contain, and
will not contain, any untrue statement of material fact and do
not omit, and will not omit, to state any material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
the Company makes no representations or warranties as to
information contained in or omitted from the Registration
Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives, specifically for use
in the preparation thereof.
(i) The financial statements of the Company, together with related
notes and schedules as set forth in the Registration
Statement, present fairly the financial position and the
results of operations and cash flows of the Company at the
indicated dates and for the indicated periods. Such financial
statements and related schedules have been prepared in
accordance with generally accepted accounting principles,
consistently applied throughout the periods involved, except
as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. No
other financial statements or supporting schedules are
required to be included in the Registration Statement. The
summary financial and statistical data included in the
Registration Statement presents fairly the information shown
therein and such data has been compiled on a basis consistent
with the financial statements presented therein and the books
and records of the Company. The pro forma financial statements
and
4
other pro forma financial information included in the
Registration Statement and the Prospectus present fairly
the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, have been
properly compiled on the pro forma basis described therein,
and, in the opinion of the Company, the assumptions used in
the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(j) Xxxxxx Xxxxxxxx LLP, who have certified certain of the
financial statements filed with the Commission as part of the
Registration Statement, are independent public accountants as
required by the Act and the Rules and Regulations.
(k) There is no action, suit, claim or proceeding pending or, to
the knowledge of the Company, threatened against the Company
before any court or administrative agency or otherwise which
if determined adversely to the Company might result in any
material adverse change in the earnings, business, management,
properties, assets, rights, operations, condition (financial
or otherwise) or prospects of the Company or to prevent the
consummation of the transactions contemplated hereby, except
as set forth in the Registration Statement.
(l) The Company has good and marketable title to all of the
properties and assets reflected in the financial statements
hereinabove described (or as described in the Registration
Statement), and such properties and assets are not subject to
any lien, mortgage, pledge, charge or encumbrance of any kind
except those reflected in such financial statements (or as
described in the Registration Statement) or which are not
material in amount. The Company occupies its leased properties
under valid and binding leases conforming in all material
respects to the description thereof set forth in the
Registration Statement.
(m) The Company has filed all federal, state, local and foreign
tax returns which have been required to be filed and have paid
all taxes indicated by said returns and all assessments
received by it to the extent that such taxes have become due.
All tax liabilities have been adequately provided for in the
financial statements of the Company, and the Company does not
know of any actual or proposed additional material tax
assessments.
(n) Since the respective dates as of which information is given in
the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change
or any development involving a prospective material adverse
change in or affecting the earnings, business, management,
properties, assets, rights, operations, condition (financial
or otherwise), or prospects of the Company, whether or not
occurring in the ordinary course of business, and there has
not been any material transaction entered into or any material
transaction that is probable of being entered into by the
Company, other than transactions in the ordinary course of
business and changes and transactions
5
described in the Registration Statement, as it may be
amended or supplemented. The Company has no material
contingent obligations which are not disclosed in the
Company's financial statements, including the notes
thereto, included in the Registration Statement.
(o) The Company is not, nor with the giving of notice or lapse of
time or both, will it be, in violation of or in default under
its charter or by-laws or under any agreement, lease,
contract, indenture or other instrument or obligation to which
it is a party or by which it, or any of its properties or
assets, is bound and which default is of material significance
in respect of the condition, financial or otherwise of the
Company or the business, management, properties, assets,
rights, operations, condition (financial or otherwise) or
prospects of the Company. The execution and delivery of this
Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to
which the Company is a party or by which its properties or
assets are bound, or of the charter or by-laws of the Company
or any order, rule or regulation applicable to the Company of
any court or of any regulatory body or administrative agency
or other governmental body having jurisdiction.
(p) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory,
administrative or other governmental body necessary in
connection with the execution and delivery by the Company of
this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required
by the Commission, the NASD or such additional steps as may be
necessary to qualify the Shares for public offering by the
Underwriters under state securities or blue sky laws) has been
obtained or made and is in full force and effect.
(q) The Company holds all material licenses, certificates and
permits from governmental authorities that are necessary for
the conduct of the Company's business.
(r) The Company is conducting its business in compliance in all
material respects with all applicable local, state, federal
and foreign laws, rules and regulations, including without
limitation, all such laws, rules and regulations of the
jurisdictions in which the Company is conducting business.
(s) The Company owns or possesses adequate licenses or other
rights to use the patents and patent applications (the
"Company Patents"), trademarks, trade names, service marks,
copyrights, licenses, approvals, inventions, know-how
(including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems
or procedures) and other similar rights and intellectual
property necessary to conduct its business as now conducted
(collectively, the "Company Intellectual Property") and has
taken all steps
6
reasonably necessary to secure assignments of such
intellectual property from its employees and contractors;
to the knowledge of the Company, none of the technology
employed by the Company has been obtained or is being used
by the Company in violation of any contractual or fiduciary
obligation binding on the Company, its directors or
executive officers or, to the Company's knowledge, any of
its employees or consultants; and the Company has taken and
will maintain reasonable measures to prevent the
unauthorized dissemination or publication of its
confidential information. The Company Patents are listed on
Exhibit A hereto.
The Company knows of no material infringement by others of
patents, patent rights, trade names, trademarks or copyrights
owned by or licensed to the Company, except as disclosed in
the Registration Statement. The Company has good and
marketable title to the patents and patent applications
referred to in the Prospectus except as disclosed in the
Registration Statement.
The Company has not infringed, interfered with or
misappropriated any patents, patent rights, trade names,
trademarks, copyrights or other intellectual property rights
of others, which infringement, if the subject of any
unfavorable decision, ruling or finding would, individually or
in the aggregate, be reasonably likely to result in a material
adverse change in the earnings, business, management,
properties, assets, rights, operations, condition (financial
or otherwise) or prospects of the Company.
To the Company's knowledge, there are no legal or governmental
proceedings pending relating to trademarks, trade names,
patent rights, mask works, copyrights, licenses, trade secrets
or other intellectual property rights of the Company other
than the prosecution by the Company or its outside patent
counsel of its patent applications and trademarks before the
United States Patent and Trademark Office ("PTO") and
appropriate foreign government agencies, and no proceedings
are threatened or contemplated by governmental authorities or
others relating to trademarks, trade names, patent rights,
mask works, copyrights, licenses or other intellectual
property rights of the Company.
The Company has duly and properly filed or caused to be filed
with the PTO and applicable foreign and international patent
authorities as indicated all patent applications listed on
Exhibit A (the "Company Patent Applications"); in connection
with the filing of the Company Patent Applications, the
Company conducted reasonable investigations of the published
literature and patent references relating to the inventions
claimed in such applications; to the Company's knowledge, it
has complied with the PTO's duty of candor and disclosure for
the Company Patent Applications and has made no
misrepresentation in the Company Patent Applications; the
Company is unaware of any facts material to a determination of
patentability regarding the Company Patent Applications not
called to the attention of the PTO; the Company is unaware of
any facts not called to the attention of the PTO which would
preclude the grant of a patent for the Company Patent
Applications; and the Company has
7
no knowledge of any facts which would preclude it from
having clear title to the Company Patent Applications
except as disclosed in the Registration Statement.
(t) Neither the Company, nor any of its affiliates, has taken or
will take, directly or indirectly, any action designed to
cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares. The Company
acknowledges that the Underwriters may engage in passive
market making transactions in the Shares on the Nasdaq Stock
Market in accordance with Rule 103 of Regulation M under the
Exchange Act.
(u) The Company is not, and after the issuance and sale of, and
the receipt of payment for, the Shares and the application of
the net proceeds therefrom as described in the Prospectus will
not be, an "investment company" or an entity "controlled" by
an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act"), and the
rules and regulations of the Commission thereunder.
(v) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(w) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct
of its business and the value of its properties and as is
customary for companies engaged in similar industries.
(x) The Company is in compliance in all material respects with all
currently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA")
for which failure to comply would have a material adverse
effect upon the business of the Company; no "reportable event"
(as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company
would have any material liability; the Company has not
incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in
all material respects and to the Company's knowledge nothing
has occurred,
8
whether by action or by failure to act, which would cause
the loss of such qualification.
(y) To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the
Company's officers, directors or securityholders, except as
set forth in the Registration Statement.
(z) Subsequent to the respective dates as of which information is
given in the Registration Statement, (i) the Company has not
incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in
the ordinary course of business; (ii) the Company has not
purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any
kind on its capital stock other than ordinary and customary
dividends; and (iii) there has not been any material change in
the capital stock, short-term debt or long-term debt of the
Company, except in each case as described in such Registration
Statement.
(aa) No material labor dispute with the employees of the Company
exists, or to the knowledge of the Company, is imminent; and
the Company is not aware of any existing, threatened or
imminent labor disturbance by the employees of any of its
principal suppliers, manufacturers or contractors that could
result in any material adverse effect on the Company.
(bb) There are no business relationships or related-party
transactions involving the Company or any other person
required to be described in the Prospectus which have not been
described as required by the Act or the Rules and Regulations.
(cc) Neither the Company nor, to the best of the Company's
knowledge, any employee or agent of the Company, has made any
contribution or other payment to any official of, or candidate
for, any federal, state or foreign office in violation of any
law or of a character required to be disclosed in the
Prospectus.
(dd) The Registration Statement, the Prospectus and any Preliminary
Prospectus comply, and any amendments or supplements thereto
will comply, with any applicable laws or regulations of
foreign jurisdictions in which the Prospectus or any
Preliminary Prospectus, as amended or supplemented, if
applicable, are distributed in connection with the offering,
issuance and sale of Reserved Shares.
(ee) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other
than those obtained, is required in connection with the
offering of the Reserved Shares in any jurisdiction where the
Reserved Shares are being offered.
(ff) The Company has not offered, or caused any Representative or
its affiliates to offer, nor will it offer or cause any
Representative or its affiliates to offer, any
9
Reserved Shares to any person with the specific intent to
unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type
of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about
the Company or its services.
(gg) The Company is not in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating
to the emission, discharge, release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively,
"Environmental Laws") in any material respects, nor has the
Company received any written communication, whether from a
governmental authority, citizens group, employee or otherwise,
that alleges that the Company is in violation of any
Environmental Law, except for violations which do not,
individually or in the aggregate, have a material adverse
effect upon the business of the Company. The Company has all
permits, authorizations and approvals required under any
applicable Environmental Laws and is in compliance in all
material respects with their requirements for which failure to
obtain such permits, authorizations and approvals would have a
material adverse effect upon the business of the Company.
There is no claim, action or cause of action filed with a
court or governmental authority or any administrative,
regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings with respect to which the Company
has received written notice, and no written notice to the
Company by any person or entity alleging potential liability
for investigatory costs, cleanup costs, governmental responses
costs, natural resources damages, property damages, personal
injuries, attorneys' fees or penalties arising out of, based
on or resulting from the presence, or release into the
environment, of any Hazardous Materials at any location owned,
leased or operated by the Company now or in the past
(collectively, "Environmental Claims"), pending or, to the
best of the Company's knowledge, threatened against the
Company or any person or entity whose liability for any
Environmental Claim the Company has retained or assumed either
contractually or by operation of law nor are there any events
or circumstances that might reasonably be expected to form the
basis for an Environmental Claim. To the best of the Company's
knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence
or disposal of any Hazardous Materials, that reasonably could
result in a violation of any Environmental Law or form the
basis of a potential
10
Environmental Claim against the Company or against any person
or entity whose liability for any Environmental Claim the
Company has retained or assumed either contractually or by
operation of law which would have a material adverse effect
upon the business of the Company.
(hh) The Company has reviewed its operations and any third parties
with which the Company has a material relationship to evaluate
the extent to which the business or operations of the Company
will be affected by the Year 2000 Problem. As a result of such
review, the Company has no reason to believe, and does not
believe, that the Year 2000 Problem will result in a material
adverse change in the earnings, business, management,
properties, assets, rights, operations, condition (financial
or otherwise) or prospects of the Company or result in any
material loss or interference with the Company's business or
operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in
the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data or in
the operation of mechanical or electrical systems of any kind
will not, in the case of dates or time periods occurring after
December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1,
2000.
(ii) Any certificate signed by an officer of the Company delivered
to the Representatives or to counsel for the Underwriters
pursuant to this Agreement or in connection with the Closing
contemplated hereby shall be deemed to be a representation and
warranty by the Company to each Underwriter as to the matters
covered thereby.
(2) PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set
forth, the Company agrees to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at
a price of $____ per share, the number of Firm Shares set
forth opposite the name of each Underwriter in Schedule I
hereof, subject to adjustments in accordance with Section 9
hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be made
in New York Clearing House funds by federal (same day) funds
against delivery of certificates therefor to the
Representatives for the several accounts of the Underwriters.
Such payment and delivery are to be made through the
facilities of the Depository Trust Company, New York, New York
at 10:00 a.m., New York time, on the third business day after
the date of this Agreement or at such other time and date not
later than five business days thereafter as you and the
Company shall agree upon, such time and date being herein
referred to as the "Closing Date." As used herein, "business
day" means a day on which the New York Stock Exchange is open
for trading and on which banks in New York are open for
business and are not permitted by law or executive order to
11
be closed. The certificates for the Firm Shares, if any, will
be delivered in such denominations and in such registrations
as the Representatives may request in writing not later than
the second full business day prior to the Closing Date, and
will be made available for inspection by the Representatives
at least one business day prior to the Closing Date.
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an
option to the several Underwriters to purchase the Option
Shares at the price per share as set forth in the first
paragraph of this Section 2. The option granted hereby may be
exercised in whole or in part by giving written notice (i) at
any time before the Closing Date and (ii) only once thereafter
within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company
setting forth the number of Option Shares as to which the
several Underwriters are exercising the option, the names and
denominations in which the Option Shares are to be registered
and the time and date at which such certificates are to be
delivered. The time and date at which certificates for Option
Shares (if any) are to be delivered shall be determined by the
Representatives but shall not be earlier than three nor later
than 10 full business days after the exercise of such option,
nor in any event prior to the Closing Date (such time and date
being herein referred to as the "Option Closing Date"). If the
date of exercise of the option is three or more days before
the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date. The number of Option Shares
to be purchased by each Underwriter shall be in the same
proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of Firm Shares being
sold hereunder, adjusted by you in such manner as to avoid
fractional shares. The option with respect to the Option
Shares granted hereunder may be exercised only to cover
over-allotments in the sale of the Firm Shares by the
Underwriters. You, as Representatives of the several
Underwriters, may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to
the Company. To the extent, if any, that the option is
exercised, payment for the Option Shares shall be made on the
Option Closing Date in federal (same day) funds through the
facilities of the Depository Trust Company in New York, New
York drawn to the order of the Company.
(3) OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it advisable to
do so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
12
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with a
Master Agreement Among Underwriters entered into by you and the several other
Underwriters, a copy of which has been furnished to the Company. Any short
position effected by the Underwriters on behalf of the syndicate in excess of
the over-allotment shall not be greater than that set forth in the Master
Agreement Among Underwriters as of the date hereof.
(4) COVENANTS OF THE COMPANY. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the
procedure in Rule 430A of the Rules and Regulations is
followed, to prepare and timely file with the Commission under
Rule 424(b) of the Rules and Regulations a Prospectus in a
form approved by the Representatives containing information
previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules
and Regulations, (B) not file any amendment to the
Registration Statement or supplement to the Prospectus of
which the Representatives shall not previously have been
advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or
which is not in compliance with the Rules and Regulations, and
(C) file on a timely basis all reports and any definitive
proxy or information statements required to be filed by the
Company with the Commission subsequent to the date of the
Prospectus and prior to the termination of the offering of the
Shares by the Underwriters.
(b) The Company will advise the Representatives promptly (A) when
the Registration Statement or any post-effective amendment
thereto shall have become effective, (B) of receipt of any
comments from the Commission, (C) of any request of the
Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution
of any proceedings for that purpose. The Company will use its
best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to
obtain as soon as possible the lifting thereof, if issued.
(c) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the
securities laws of such jurisdictions as the Representatives
may reasonably have designated in writing and will make such
applications, file such documents, and furnish such
information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified
or required to file such a consent. The Company will, from
time to time, prepare and file such statements, reports, and
other documents, as are or may be required to continue such
qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the
Shares.
13
(d) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any
Preliminary Prospectus as the Representatives may reasonably
request. The Company will deliver to, or upon the order of,
the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the
Prospectus in final form, or as thereafter amended or
supplemented, as the Representatives may reasonably request.
The Company will deliver to the Representatives at or before
the Closing Date, four signed copies of the Registration
Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Representatives such
number of copies of the Registration Statement (including such
number of copies of the exhibits filed therewith that may
reasonably be requested), and of all amendments thereto, as
the Representatives may reasonably request.
(e) The Company will comply with the Act and the Rules and
Regulations, and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of
the Commission thereunder, so as to permit the completion of
the distribution of the Shares as contemplated in this
Agreement and the Prospectus. If during the period in which a
prospectus is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of
which, in the judgment of the Company or in the reasonable
opinion of the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements
therein, in the light of the circumstances existing at the
time the Prospectus is delivered to a purchaser, not
misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company
promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so
amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so
that the Prospectus will comply with the law.
(f) The Company hereby agrees that it will ensure that the
Reserved Shares will be restricted as required by the NASD or
the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date
of this Agreement. The Underwriters will notify the Company as
to which persons will need to be so restricted. At the request
of the Underwriters, the Company will direct the transfer
agent to place a stop transfer restriction upon such
securities for such period of time. Should the Company
release, or seek to release, from such restrictions any of the
Reserved Shares, the Company agrees to reimburse the
Underwriters for any reasonable expenses (including, without
limitation, legal expenses) they incur in connection with such
release.
(g) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any
event not later than 15 months after the effective date of the
Registration Statement, an earning statement (which need not
be audited) in reasonable detail, covering a period of at
least 12 consecutive
14
months beginning after the effective date of the
Registration Statement, which earning statement shall
satisfy the requirements of Section 11(a) of the Act and
Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
(h) Prior to the Closing Date, the Company will furnish to the
Underwriters, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim
financial statements of the Company for any period subsequent
to the period covered by the most recent financial statements
appearing in the Registration Statement and the Prospectus.
(i) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other securities
convertible into or exchangeable or exercisable for shares of
Common Stock or derivative of Common Stock (or agreement for
such) will be made for a period of 180 days after the date of
this Agreement, directly or indirectly, by the Company
otherwise than hereunder or with the prior written consent of
Deutsche Bank Securities Inc., except (i) for issuance by the
Company of shares of Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding
on the date hereof, (ii) for the grant by the Company of any
option or right to purchase shares of Common Stock pursuant to
the Company's stock option plan and employee purchase plan,
each as in effect on the date of this Agreement; and (iii) for
the issuance by the Company of shares of Common Stock in
connection with a merger with or acquisition of a corporation
or entity that is not an affiliate of the Company or an
acquisition of the assets or property of a corporation or
entity that is not an affiliate of the Company; provided,
however, that the Company shall cause the holder of any
securities acquired pursuant to the exceptions in clauses (i),
(ii) and, where practicable, (iii) to furnish to the
Underwriters a Lockup Agreement (as defined below).
(j) The Company will use its best efforts to list, subject to
notice of issuance, the Shares on the Nasdaq Stock Market.
(k) The Company has caused each officer and director, shareholder,
optionholder and warrant holder of the Company to furnish to
you, on or prior to the date of this Agreement, a letter or
letters, in form and substance satisfactory to the
Underwriters, pursuant to which each such person agrees not to
offer, sell, sell short or otherwise dispose of any shares of
Common Stock of the Company or other capital stock of the
Company, or any other securities convertible, exchangeable or
exercisable for Common Shares or derivative of Common Shares
owned by such person (or as to which such person has the right
to direct the disposition of) or request the registration for
the offer or sale of any of the foregoing for a period of 180
days after the date of this Agreement, directly or indirectly,
except with the prior written consent of Deutsche Bank
Securities Inc. (the "Lockup Agreements").
15
(l) The Company shall apply the net proceeds of its sale of the
Shares as set forth in the Prospectus and shall file such
reports with the Commission with respect to the sale of the
Shares and the application of the proceeds therefrom as may be
required in accordance with Rule 463 under the Act.
(m) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Shares in such a
manner as would require the Company to register as an
investment company under the 1940 Act.
(n) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
(o) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization
or manipulation of the price of any securities of the Company.
(5) COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company; the cost
of printing and delivering to, or as requested by, the Underwriters copies of
the Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Underwriters' Selling Memorandum, if any, the Underwriters'
Invitation Letter, the Listing Application, the Blue Sky Survey and any
supplements or amendments thereto; the filing fees of the Commission; the filing
fees and expenses (including legal fees and disbursements) incident to securing
any required review by the NASD of the terms of the sale of the Shares; the
Listing Fee of the Nasdaq Stock Market; and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Shares under state securities or blue sky laws. Any
transfer taxes imposed on the sale of the Shares to the several Underwriters
will be paid by the Company. The Company agrees to pay all costs and expenses of
the Underwriters, including the fees and disbursements of counsel for the
Underwriters, incident to the offer and sale of the Reserved Shares. The Company
shall not, however, be required to pay for any of the Underwriters' expenses
(other than those related to qualification under NASD regulation and state
securities or blue sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Representatives pursuant to Section
11 hereof, or by reason of any failure, refusal or inability on the part of the
Company to perform any undertaking or satisfy any condition of this Agreement or
to comply with any of the terms hereof on its part to be performed, unless such
failure to satisfy said condition or to comply with said terms be due to the
default or omission of any Underwriter, then the Company shall reimburse the
several Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company shall not in any
16
event be liable to any of the several Underwriters for damages on account of
loss of anticipated profits from the sale by them of the Shares.
(6) CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm Shares
on the Closing Date and the Option Shares, if any, on the Option Closing Date
are subject to the accuracy, as of the Closing Date or the Option Closing Date,
as the case may be, of the representations and warranties of the Company
contained herein, and to the performance by the Company of its covenants and
obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings
required by Rule 424 and Rule 430A of the Rules and
Regulations shall have been made, and any request of the
Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed
to the Representatives and complied with to their reasonable
satisfaction. No stop order suspending the effectiveness of
the Registration Statement, as amended from time to time,
shall have been issued and no proceedings for that purpose
shall have been taken or, to the knowledge of the Company,
shall be contemplated by the Commission and no injunction,
restraining order, or order of any nature by a federal or
state court of competent jurisdiction shall have been issued
as of the Closing Date or the Option Closing Date, as the case
may be, which would prevent the issuance of the Shares. The
NASD shall have confirmed that it will not raise any objection
to the fairness and reasonableness of the underwriting terms
and arrangements.
(b) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of
Xxxxxx & Dodge LLP, counsel for the Company, dated the Closing
Date or the Option Closing Date, as the case may be, addressed
to the Underwriters (and stating that it may be relied upon by
counsel to the Underwriters) to the effect that:
(i) The Company is a corporation validly existing and in
good standing under the laws of the State of
Delaware, with corporate power and authority to own
or lease its properties and conduct its business as
described in the Registration Statement; the Company
is duly qualified to transact business in the State
of Connecticut.
(ii) The Company has authorized and outstanding capital
stock as set forth under the caption "Capitalization"
in the Prospectus; the authorized shares of the
Company's Common Stock have been duly authorized; the
outstanding shares of the Company's Common Stock have
been duly authorized and validly issued and are fully
paid and non-assessable; all of the Shares conform to
the description thereof contained in the Prospectus;
the certificates for the Shares, assuming they are in
the form
17
filed with the Commission, are in due and proper
form; the shares of Common Stock, including the
Option Shares, if any, to be sold by the Company
pursuant to this Agreement have been duly
authorized and will be validly issued, fully paid
and non-assessable when issued and paid for as
contemplated by this Agreement; and no preemptive
rights of stockholders exist with respect to any
of the Shares or the issue or sale thereof.
(iii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel there
are no outstanding securities of the Company
convertible or exchangeable into or evidencing the
right to purchase or subscribe for any shares of
capital stock of the Company and there are no
outstanding or authorized options, warrants or rights
of any character obligating the Company to issue any
shares of its capital stock or any securities
convertible or exchangeable into or evidencing the
right to purchase or subscribe for any shares of such
stock; and except as described in the Prospectus, to
the knowledge of such counsel, no holder of any
securities of the Company or any other person has the
right, contractual or otherwise, which has not been
satisfied or effectively waived, to cause the Company
to sell or otherwise issue to them, or to permit them
to underwrite the sale of, any of the Shares or the
right to have any Common Shares or other securities
of the Company included in the Registration Statement
or the right, as a result of the filing of the
Registration Statement, to require registration under
the Act of any shares of Common Stock or other
securities of the Company.
(iv) The Registration Statement has become effective under
the Act and, to the best knowledge of such counsel,
no stop order proceedings with respect thereto have
been instituted or are pending or threatened under
the Act.
(v) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in
all material respects with the requirements of the
Act and the applicable rules and regulations
thereunder (except that such counsel need express no
opinion as to the financial statements and schedules
and notes therein). For the purpose of passing upon
the form of such documents, we have not independently
verified and are not passing upon, and have assumed
the correctness and completeness of, the statements
made therein.
(vi) The statements in the Prospectus under the captions
"Management -- Employee Benefits Plans," "Certain
Relationships and Related Party Transactions,"
"Description of Capital Stock" and "Shares Eligible
for Future Sale," in each case insofar as such
statements constitute a summary of documents referred
to therein or matters of law, fairly summarize in all
material respects the information called for with
respect to such documents and matters.
18
(vii) Such counsel does not know of any contracts or
documents required to be filed as exhibits to the
Registration Statement or described in the
Registration Statement or the Prospectus which are
not so filed or described as required, and such
contracts and documents as are summarized in the
Registration Statement or the Prospectus are fairly
summarized in all material respects.
(viii) To such counsel's knowledge, there is no material
legal or governmental proceedings pending or
threatened against the Company except as described in
the Prospectus.
(ix) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated
do not and will not conflict with or result in a
breach of any of the terms or provisions of, or
constitute a default under, the charter or by-laws of
the Company, or any material agreement or instrument
filed as an exhibit to the Registration Statement to
which the Company is a party or by which the Company
is bound.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) No approval, consent, order, authorization,
designation, declaration or filing by or with any
regulatory, administrative or other governmental body
is necessary in connection with the execution and
delivery of this Agreement and the consummation of
the transactions herein contemplated (other than as
may be required by the NASD or as required by foreign
securities and state securities and blue sky laws, as
to which such counsel need express no opinion) except
such as have been obtained or made.
(xii) The Company is not, and will not become, as a result
of the consummation of the transactions contemplated
by this Agreement, and application of the net
proceeds therefrom as described in the Prospectus,
required to register as an investment company under
the 1940 Act.
In rendering such opinion Xxxxxx & Dodge LLP may rely as to matters
governed by the laws of states other than the Commonwealth of Massachusetts, the
General Corporation Law of the State of Delaware or federal laws on local
counsel in such jurisdictions, provided that in each case Xxxxxx & Dodge LLP
shall state that they believe that they and the Underwriters are justified in
relying on such other counsel. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has come to
the attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Act) and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
19
statements therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and Regulations and as
of the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they are made, not misleading (except that such counsel need express
no view as to financial statements, schedules and statistical information
therein). With respect to such statement, Xxxxxx & Dodge LLP may state that
their belief is based upon the procedures set forth therein, but is without
independent check and verification.
(c) The Representatives shall have received from Ropes & Xxxx,
counsel for the Underwriters, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, with
respect to the incorporation of the Company, the validity of
the Shares delivered on the Closing Date or the Option Closing
Date, as the case may be, the Registration Statement, the
Prospectus and other related matters as the Representatives
may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In rendering such
opinion, Ropes & Xxxx may rely as to all matters governed
other than by the laws of the Commonwealth of Massachusetts,
the General Corporation Law of the State of Delaware, or
federal laws on the opinion of counsel referred to in
Paragraph (b) of this Section 6. In addition to the matters
set forth above, such opinion shall also include a statement
to the effect that nothing has come to the attention of such
counsel which leads them to believe that (i) the Registration
Statement, or any amendment thereto, as of the time it became
effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under
the Act) as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing
Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact, necessary
in order to make the statements, in the light of the
circumstances under which they are made, not misleading
(except that such counsel need express no view as to financial
statements, schedules and statistical information therein).
With respect to such statement, Ropes & Xxxx may state that
their belief is based upon the procedures set forth therein,
but is without independent check and verification.
(d) The Representatives shall have received at or prior to the
Closing Date from Ropes & Xxxx a memorandum or summary, in
form and substance satisfactory to the Representatives, with
respect to the qualification for offering and sale by the
Underwriters of the Shares under the state securities or blue
sky laws of such jurisdictions as the Representatives may
reasonably have designated to the Company.
(e) You shall have received, on each of the dates hereof, the
Closing Date and the Option Closing Date, as the case may be,
a letter dated the date hereof, the
20
Closing Date or the Option Closing Date, as the case may
be, in form and substance satisfactory to you, of Xxxxxx
Xxxxxxxx LLP confirming that they are independent public
accountants within the meaning of the Act and the
applicable Rules and Regulations thereunder and stating
that in their opinion the financial statements and
schedules examined by them and included in the Registration
Statement comply in form in all material respects with the
applicable published accounting requirements of the Act and
the related published Rules and Regulations; and containing
such other statements and information as is ordinarily
included in accountants' "comfort letters" to Underwriters
with respect to the financial statements and certain
financial and statistical information contained in the
Registration Statement and Prospectus.
(f) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Chief
Financial Officer of the Company to the effect that, as of the
Closing Date or the Option Closing Date, as the case may be,
each of them severally represents on behalf of the Company as
follows:
(i) The Registration Statement has become effective under
the Act and no stop order suspending the
effectiveness of the Registration Statement has been
issued, and no proceedings for such purpose have been
taken or are, to his knowledge, contemplated by the
Commission;
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as
of the Closing Date or the Option Closing Date, as
the case may be;
(iii) All filings required to have been made pursuant to
Rules 424 or 430A under the Act have been made;
(iv) The Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied at or prior to such closing
date;
(v) He has examined the Registration Statement and the
Prospectus and, in his opinion, as of the effective
date of the Registration Statement, the statements
contained in the Registration Statement were true and
correct, and such Registration Statement and
Prospectus did not omit to state a material fact
required to be stated therein or necessary in order
to make the statements therein not misleading, and
since the effective date of the Registration
Statement, no event has occurred which should have
been set forth in a supplement to or an amendment of
the Prospectus which has not been so set forth in
such supplement or amendment; and
(vi) Since the respective dates as of which information is
given in the Registration Statement and Prospectus,
there has not been any material adverse change or any
development involving a prospective material
21
adverse change in or affecting the condition,
financial or otherwise, of the Company or the
earnings, business, management, properties, assets,
rights, operations, condition (financial or
otherwise) or prospects of the Company, whether or
not arising in the ordinary course of business.
(g) On each of the Closing Date and the Option Closing Date, if
any, the Representatives shall have received a certificate or
certificates of the Secretary of the Company in form and
substance reasonably satisfactory to the Representatives.
(h) The Company shall have furnished to the Representatives such
further certificates and documents confirming the
representations and warranties, covenants and conditions
contained herein and related matters as the Representatives
may reasonably have requested.
(i) The Firm Shares and Option Shares, if any, have been approved
for designation upon notice of issuance on the Nasdaq Stock
Market.
(j) The Lockup Agreements described in Section 4(k) shall be in
full force and effect.
(k) The Representatives shall have received from the Company's
outside patent counsel an opinion dated the Closing Date or
the Option Closing Date, as the case may be, in substantially
the form attached as Exhibit B.
(l) The Representatives shall have received from the Company's
Director of Intellectual Property, an opinion dated the
Closing Date or the Option Closing Date, as the case may be,
in substantially the form attached as Exhibit C.
(m) The Representatives shall have received from Venable, Baetjer,
Xxxxxx & Xxxxxxxxx, LLP, special regulatory counsel to the
Company, an opinion dated the Closing Date or the Option
Closing Date, as the case may be, to the effect that:
(i) Such counsel represents the Company in certain matters
relating to the Unites States Federal Food Drug, and
Cosmetic Act (the "FFDC Act") and related government
regulatory matters. Such counsel has made such
investigations of fact and law as such counsel deemed
necessary in connection with the opinion set
forth below.
(ii) Based upon and subject to the foregoing, and subject
to the additional qualifications, exclusions,
exceptions, limitations and assumptions set forth
herein, such counsel is of the opinion that the
portions of the Registration Statement and Prospectus
entitled "Risk Factors -- Our business and the
products, if any,... are subject to government
regulation...," and "Business-Government Regulation,"
insofar as they describe the FFDC Act, related
government regulatory matters and FDA regulations and
requirements and the application thereof to the
22
Company's business and operations (collectively, the
"Regulatory Portion"), are accurate and complete
summaries and fairly present in all material respects
such matters.
(iii) In addition to rendering the foregoing opinion, such
counsel confirms that such counsel has participated
in conferences with certain officers and
representatives of the Company, representatives of
the independent accountants for the Company, counsel
for the Underwriters and representatives of the
Underwriters in which the contents of the
Registration Statement and Prospectus and related
matters were discussed and that, while such counsel
is not passing upon and do not assume responsibility
for the factual accuracy, completeness or fairness of
the statements contained in the Registration
Statement and Prospectus, nothing has come to such
counsel's attention that would lead such counsel to
believe (A) that the Regulatory Portion included
therein at the time the Registration Statement became
effective contained any untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading and (B) that
the Regulatory Portion contains any untrue statement
of a material fact or omits to state a material fact
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading.
With respect to paragraph (iii) above, counsel may state that its
belief is based upon its participation in the preparation of the Registration
Statement and Prospectus (and any amendments or supplements thereto), review and
discussion of the contents thereof (including the review of, but not
participation in the preparation of, the documents incorporated by reference
therein), but are without independent check or verification except as specified.
In addition, with respect to factual matters addressed in the Regulatory
Portion, counsel may state that it has relied upon one or more factual
certificates from representatives of the Company, PROVIDED that such statement
is accompanied by a statement to the effect that nothing has come to the
attention of counsel to cause such counsel to believe that the representations
made in such certificate(s) are not true, complete and correct in all material
respects.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Representatives and to Ropes &
Xxxx, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Company of such termination in writing or
by telegram at or prior to the Closing Date or the Option Closing Date, as the
case may be.
In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 8
hereof).
23
(7) CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligation of the Company to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
(8) INDEMNIFICATION.
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses,
claims, damages or liabilities to which such
Underwriter or any such controlling person may become
subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement
thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading, (iii) the violation of any applicable
laws or regulations of foreign jurisdictions where
Reserved Shares have been offered to persons
designated by the Company as a result of such offer
or sale of Reserved Shares, or (iv) any act or
failure to act or any alleged act or failure to act
by any Underwriter in connection with, or relating in
any manner to, the Shares or the offering
contemplated hereby, and which is included as part of
or referred to in any loss, claim, damage, liability
or action arising out of or based upon matters
covered by clause (i) or (ii) above (PROVIDED, that
the Company shall not be liable under this clause
(iv) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action
resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful
misconduct); provided, however, that (i) the Company
will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged
omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in
conformity with written information furnished to the
Company by or through the Representatives
specifically for use in the preparation thereof, and
(ii) the indemnity agreement contained in this
Section (a) (1) with respect to any Preliminary
Prospectus or Prospectus shall not inure to the
benefit of any Underwriter from whom
24
the person asserting any such losses, claims,
damages, liabilities or expenses purchased the
Shares which is the subject thereof (or to the
benefit of any person controlling such Underwriter)
if at or prior to the written confirmation of the
sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent
or delivered to such person, if required by law so to
have been delivered, and the untrue statement or
omission of a material fact contained in such
Preliminary Prospectus or Prospectus was corrected in
the Prospectus (or the Prospectus as amended or
supplemented).
(2) to reimburse each Underwriter and each such
controlling person upon demand for any legal or other
out-of-pocket expenses reasonably incurred by such
Underwriter or such controlling person in connection
with investigating or defending any such loss, claim,
damage or liability, action or proceeding or in
responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not
such Underwriter or controlling person is a party to
any action or proceeding. In the event that it is
finally judicially determined that the Underwriters
were not entitled to receive payments for legal and
other expenses pursuant to this subparagraph, the
Underwriters will promptly return all sums that had
been advanced pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify and
hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement and each
person, if any, who controls the Company within the meaning of
the Act, against any losses, claims, damages or liabilities to
which the Company or any such director, officer, or
controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse
any legal or other expenses reasonably incurred by the Company
or any such director, officer, or controlling person in
connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided,
however, that each Underwriter will be liable in each case to
the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission
has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in
reliance upon and in conformity with written information
furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
25
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to this
Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be
available to any party who shall fail to give notice as
provided in this Section 8(c) if the party to whom notice was
not given was unaware of the proceeding to which such notice
would have related and was materially prejudiced by the
failure to give such notice, but the failure to give such
notice shall not relieve the indemnifying party or parties
from any liability which it or they may have to the
indemnified party for contribution or otherwise than on
account of the provisions of Section 8(a) or (b). In case any
such proceeding shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to
such indemnified party and shall pay as incurred the fees and
disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense.
Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the fees
and expenses of the counsel retained by the indemnified party
in the event (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such
counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the
indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them, or (iii) the indemnifying party shall have
failed to assume the defense and employ counsel acceptable to
the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that
the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm
shall be designated in writing by you in the case of parties
indemnified pursuant to Section 8(a) and by the Company in the
case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by
reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent
of the indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim,
action or proceeding of which indemnification may be sought
hereunder (whether or not any indemnified party is an actual
or potential party to such claim, action or proceeding) unless
such settlement, compromise or consent includes an
unconditional release of each
26
indemnified party from all liability arising out of such
claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or (b) above in respect of any
losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions or proceedings in
respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering
of the Shares; provided, however, no contribution under this
Section 8(d) is required if the indemnification provided for
in Section 8(a) or (b) were not available by reason of the
exceptions and limitations set forth therein. If, however, the
allocation provided by the immediately preceding sentence is
not permitted by applicable law then each indemnifying party
shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates
to information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 8(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The
27
Underwriters' obligations in this Section 8(d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be
sought under this Section 8 hereby consents to the
jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such
court may be served upon him or it by any other contributing
party and consents to the service of such process and agrees
that any other contributing party may join him or it as an
additional defendant in any such proceeding in which such
other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or
contribution under this Section 8 shall be paid by the
indemnifying party to the indemnified party as such losses,
claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the
Company set forth in this Agreement shall remain operative and
in full force and effect, regardless of (i) any investigation
made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or
officers or any persons controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
(g) In connection with the offer and sale of the Reserved Shares,
the Company agrees, promptly upon a request in writing, to
indemnify and hold harmless the Underwriters from and against
any and all losses, liabilities, claims, damages and expenses
incurred by them as a result of the failure of persons
designated by the Company to pay for and accept delivery of
Reserved Shares which, by the end of the first business day
following the date of this Agreement, were subject to a
properly confirmed agreement to purchase.
(9) DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for the portion of the Shares
which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company), you, as
Representatives of the Underwriters, shall use your reasonable efforts to
procure within 36 hours thereafter one or more of the other Underwriters, or any
others, to purchase from the Company such amounts as may be agreed upon and upon
the terms set forth herein, the Firm Shares or Option Shares, as the case may
be, which the defaulting Underwriter or Underwriters failed to purchase. If
during such 36 hours you, as such Representatives, shall not have procured such
other Underwriters, or any
28
others, to purchase the Firm Shares or Option Shares, as the case may be,
agreed to be purchased by the defaulting Underwriter or Underwriters, then
(a) if the aggregate number of shares with respect to which such default
shall occur does not exceed 10% of the Firm Shares or Option Shares, as the
case may be, covered hereby, the other Underwriters shall be obligated,
severally, in proportion to the respective numbers of Firm Shares or Option
Shares, as the case may be, which they are obligated to purchase hereunder,
to purchase the Firm Shares or Option Shares, as the case may be, which such
defaulting Underwriter or Underwriters failed to purchase, or (b) if the
aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company or
you, as the Representatives of the Underwriters, will have the right, by
written notice given within the next 36-hour period to the parties to this
Agreement, to terminate this Agreement without liability on the part of the
non-defaulting Underwriters or of the Company except to the extent provided
in Section 8 hereof. In the event of a default by any Underwriter or
Underwriters as set forth in this Section 9, the Closing Date or Option
Closing Date, as the case may be, may be postponed for such period, not
exceeding seven days, as you, as Representatives, may determine in order that
the required changes in the Registration Statement or in the Prospectus or in
any other documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any action
taken under this Section 9 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
(10) NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Underwriters, to Deutsche Bank Securities
Inc., Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx;
with a copy to Deutsche Bank Securities Inc., One Bankers Trust Plaza, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; if to the
Company, to Genaissance Pharmaceuticals, Inc. (5 Science Park, New Haven,
Connecticut 06511), Attention: President; with a copy to Xxxxxx & Dodge LLP, Xxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxx, Esq.
(11) TERMINATION. This Agreement may be terminated:
(a) by you by notice to the Company at any time prior to the
Closing Date if any of the following has occurred: (i) since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material
adverse change or any development involving a prospective
material adverse change in or affecting the condition,
financial or otherwise, of the Company or the earnings,
business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the
Company, whether or not arising in the ordinary course of
business, (ii) any outbreak or escalation of hostilities or
declaration of war or national emergency or other national or
international calamity or crisis or change in economic or
political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change
on the financial markets of the United States would,
29
in your reasonable judgment, make it impracticable or
inadvisable to market the Shares or to enforce contracts
for the sale of the Shares, or (iii) suspension of trading
in securities generally on the New York Stock Exchange or
the American Stock Exchange or the limitation on prices
(other than limitations on hours or numbers of days of
trading) for securities on either such Exchange, (iv) the
enactment, publication, decree or other promulgation of any
statute, regulation, rule or order of any court or other
governmental authority which in your reasonable opinion
materially and adversely affects or may materially and
adversely affect the business or operations of the Company,
(v) declaration of a banking moratorium by United States or
New York State authorities, (vi) any downgrading, or
placement on any watch list for possible downgrading, in
the rating of the Company's debt securities by any
"nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Exchange
Act); (vii) the suspension of trading of the Company's
common stock by the Nasdaq Stock Market, the Commission, or
any other governmental authority, or (viii) the taking of
any action by any governmental body or agency in respect of
its monetary or fiscal affairs which in your reasonable
opinion has a material adverse effect on the securities
markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
(12) SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign merely because of such purchase.
(13) INFORMATION PROVIDED BY UNDERWRITERS.
The Company and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in any Prospectus or the Registration Statement consists of the
information set forth in legends required by Item 502(d) of Regulation S-K under
the Act and the information in the table after the first paragraph, the third
paragraph (insofar as it relates to concessions and allowances) and the tenth
paragraph under the caption "Underwriting" in the Prospectus.
(14) MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers, and (c) delivery of and payment for the Shares under
this Agreement.
30
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Maryland.
31
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
GENAISSANCE PHARMACEUTICALS, INC.
By:
--------------------------------
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
DEUTSCHE BANK SECURITIES INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXX XXXXX BARNEY, INC.
UBS WARBURG LLC
As Representatives of the several
Underwriters listed on Schedule I
By: DEUTSCHE BANK SECURITIES INC.
By:
-------------------------------
Authorized Officer
32
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Deutsche Bank Securities, Inc.
Bear, Xxxxxxx & Co. Inc.
Xxxxxxx Xxxxx Barney, Inc.
UBS Warburg LLC
TOTAL
33
EXHIBIT A
LIST OF COMPANY PATENTS
34
EXHIBIT B
FORM OF LEGAL OPINION OF
OUTSIDE PATENT COUNSEL
35
EXHIBIT C
FORM OF LEGAL OPINION OF
DIRECTOR OF INTELLECTUAL PROPERTY
36
